Enterprise Resource Planning (ERP) Systems.ppt

8/20/2019 Enterprise Resource Planning (ERP) Systems.ppt

1/18

Enterprise ResourcePlanning (ERP) Systems


2/18

What is ERP?

An ERP system is an attempt to integrate

all functions across a company to a single

computer system that can serve all those

functions’ specific needs.

“Integration” is the key word for ERPimplementation.


3/18

What is RP?

It may also integrate key customers and

suppliers as part of the enterprise’s

operation. It provides integrated dataase and custom!

designed report systems.

It adopts a set of “est practices” for carrying

out all usiness processes.


4/18

Major Reasons for Adopting ERP

Integrate financial information

Integrate customer order information

"tandardi#e and speed up operations

processes

Reduce inventory

"tandardi#e $uman Resources

information


5/18

Potential Benefits of ERP

Internal %enefits

& Integration of a single source of data

& 'ommon data definition& A real!time system& Increased productivity

& Reduced operating costs& Improved internal communication& (oundation for future improvement


6/18

Potential Benefits of ERP

E)ternal %enefits

& Improved customer service and orderfulfillment

& Improved communication with suppliers andcustomers

& Enhanced competitive position& Increased sales and profits


7/18

ERP mplementation Approaches

*he ig ang + install a single ERP system

across the entire organi#ation

(ranchising + Independent ERP systems areinstalled in different units linked y common

processes, e.g., ookkeeping.

"lam dunk + install one or several ERPmodules for phased implementation of key

usiness processes.


8/18

Major Phases of ERP mplementation (!ent Sandoe" Enterprise ntegration)

Initiation + develop usiness case, pro-ectscope, and implementation strategy

Planning + estalish implementation team,determine goals and o-ectives, estalishmetrics

Analysis and process design + analy#e andimprove e)isting processes, map newprocesses to e adopted y the system


9/18

Major Phases of ERP mplementation (!ent Sandoe" Enterprise ntegration)

Reali#ation + install a ase system,customi#ation, and test the system

*ransition + replace the formal system withthe new system, data conversion

peration + monitor and improve system

performance, provide continued training andtechnical support


10/18

Major #hallenges to ERP mplementation

/imitations of ERP technical capailities

Inconsistency with e)isting usiness

processes'osts ! implementation 0hardware, software,

training, consulting1 and maintenance

Impact on organi#ational structure 0frontoffice vs. ack office, product lines, etc.1

'hanges in employee responsiilities


11/18

Major #hallenges to ERP mplementation

(le)iility of software system upgrades

Implementation timelines

Availaility of internal technical knowledge

and resources

Education and training

Implementation strategy and e)ecution

Resistance to change


12/18

$otal #ost of ERP %&nership (inmillions of ') ME$A roup Sur*ey

System Medium Average Smallest Largest

Baan 16.1 13.6 0.8 26.5

JD Edards 3.! 5." 0.8 21.6

Las#n 1.! $.1 0.$ 16.$

%ra&le 5.$ 11.2 1.$ $2.8

'e#(leS#)t ".$ 15.5 1.3 58.6

SA' 13.! 52.2 0.8 308.2

SSA 1." ".6 0." 2!.6

(rom2 “ Implementation "tudy Reveals 'osts, %enefits,” *hePerformance Advantage, API'", ctoer 3444, p.5


13/18

Benefits of ERP mplementation(ME$A roup Sur*ey)

%enefits are mostly in terms of cost containment rather

than revenue increase.

67 companies 0out of 871 reported annual savings of

over 96 millions with the median annual saving of 93.8

million. :ine companies account for 57.;< of the

reported savings.

*he study found that much of the ERP value is inindirect, non!=uantifiale enefits.

A numer of companies surveyed had a negative net

present value.


14/18

ERP mplementation !ey Ena+lers(AP,# BestPractice Report)

*he organi#ation is prepared for the change. *he e)ecutive leaders are active and visile in their

support. *he initiative is seen as a usiness imperative y the

organi#ation. *he resources are availale to conduct the pro-ect

completely.

A good packaged system is used and notcustomi#ed.

*he user group is trained to use the software eforeit is implemented.


15/18

ERP mplementation Practices(AP,# BestPractice Report)

Pro-ect >anagement

& rgani#ations link implementation teams to oth thetechnical 0I"1 and functional departments.

& *hey tightly control implementation processes& *hey appropriately use consultants throughout the

implementation process

& *hey manage turnover of key implementation employees& *hey have asic usiness reasons for implementation& *hey align implementation with organi#ational strategies


16/18


'hange >anagement

& Redesigned -os call for higher levels of skills and

accountaility& 'hange management is viewed as more than -ust

increased training and communication

& Enterprise!wide systems drive redesigned changes.& *he e)ecutive sponsor is the change agent.& Resistance from the work force 0including

management1 is the most significant ostacle.


17/18


*echnology E)cellence

& rgani#ations rely heavily on the ERPpackage as the ma-ority of their applicationconfiguration.

& rgani#ations implement ERP packages on

time and within udget& rgani#ations centrali#e support groups within

their I* departments


18/18

-e& .e*elopments n ERP

Availaility of we!ased and wireless ERP

systems

Adoption of easy!to!install ERP systems

/inkage to other software systems, e.g.,

supply chain management system, e!commerce, customer relationship

management system

Enterprise Resource Planning (ERP) Systems.ppt

Documents

Transcript of Enterprise Resource Planning (ERP) Systems.ppt